This guide is intended for people wishing to improve the way their organization is structured and governed.
Table of Contents
- Introduction: Why change your model?
- Familiarise yourself with alternative organizational theories
- Avoid the 4 Decision-Making Tyrannies
- 4 Steps to Bring the Other In
- Change by Doing (Break Old Patterns)
Introduction: Why change your model?
Organizational governance is a discipline that is highly institutionalized. Driving change can seem daunting and it is very tempting to avoid internal conflicts by either reinforcing top-down decision-making processes or sticking to skin-deep consensus (consensus that is reached without a diversity of opinions).
However, top-down and consensus governance models only work in specific contexts. The environment and characteristics of your organization are constantly evolving. Its structure, leadership style and culture need to adapt to these changes. Here are few drivers of organizational change:
- Your values: people and organizations realize more than ever that diversity and inclusion are values worth fighting for. And these values might not be embedded in your current way of doing things.
- Your ecosystem: your customers, partners and suppliers are increasingly diverse, your decision-making process needs to be more inclusive in order to stay competitive.
- Your growth: some organizational models can work very effectively for small organizations and lead to disaster in larger ones. The bigger the organization, the more it needs to let “the Other” in and internalize the multiple facets of the ecosystem it operates in.
The good news is that a wide array of organizational tools and frameworks have been developed over recent decades to meet these challenges. Some are based on radically new governance models, others make small but substantial changes to existing management practices. I have tried to classify them in easy-to-grasp sections so that readers can quickly find the most relevant tools for their organization. Please feel free to contact me if you have any other experience, tool or framework to share!
Familiarise yourself with alternative organizational theories
Take 30 minutes or so to read our series of interviews with academics, ethicists and practitioners. Learn about the following overlapping concepts:
- Pluralistic organizations: organizations enabling actors with diffuse power and divergent perspectives to cooperate on substantive issues.
- Inclusive economy: one that delivers value not solely to investors and owners of capital but also to a much more inclusive, broader set of stakeholders, notably those who are marginalized in communities, cultures, societies and governance.
- Postmodern organizations: organizations that are pluralistic, decentralized and self-reflexive, in particular in regard to internal and external power imbalances. These organizations pursue multi-faceted objectives (rather than single measurable goals) rooted in people’s empowerment (rather than control and bureaucracy).
- Ensemble theory of leadership: a more relational and collectivist view of leadership.
- Heterarchy: denotes not a dualistic rejection of hierarchy, but rather an acceptance of multiple ways of organizing beyond just hierarchy.
- Leaderful organizations: organizations that provide enough space for a wide spectrum of leaders to contribute within and outside their organization.
Books recommendations (some opposing viewpoints):
- Postmodern Management and Organization Theory: the text gives an overview of issues as they relate to management and organization theory and its history and assembles in one volume a variety of important works on postmodern philosophy–including feminist, cultural, and environmental philosophies.
- Organization Theory: Modern, Symbolic, and Postmodern Perspectives: in today’s organizations, stakeholders are of extreme importance. Postmodernists believe that organizations that satisfy the needs of all stakeholders perform better than those who don’t.
- Reinventing Organizations: the way we manage organizations seems increasingly out of date. We need more enlightened leaders, but we need something more: enlightened organizational structures and practices. Reinventing Organizations describes in practical detail how organizations large and small can operate in this new paradigm.
- Freedom, Inc.: Freedom, Inc.: by listening to employees instead of telling them what to do, by treating them as equals and not limiting information through a trickle-down hierarchy, and by encouraging a culture in which employees have commitments (something chosen) as opposed to jobs (something imposed), these companies liberated their workers, enabling them to fulfil their individual potential, which has led to more productive, loyal, and engaged workers, as well as significant measurable profits and growth.
- The Fortune at the Bottom of the Pyramid: typical images of poverty mask the fact that the very poor represent resilient entrepreneurs and value-conscious consumers. What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win–win scenarios.
- ’80s feminist organizational theory
Avoid the 4 Decision-Making Tyrannies
Decisions can be taken in four different ways, based on who makes decisions:
- Total freedom (structurelessness): each member of the organization can do everything they want.
- Consensus: members can only do what everybody in the organization agrees with (including themselves).
- Partial autonomy (decentralization): members of the organization can make decisions under certain conditions.
- No autonomy: all decisions are centralized.
Each of these four models is legitimate but can also develop into a form of tyranny.
The 4 Decision-Making Tyrannies
- Tyranny of structurelessness: lack of structure can provide the freedom needed for early stage grassroot movements but will leave their members exposed to external influences, pre-existing discriminations and power imbalances.
- Tyranny of consensus: what can work in small groups of like-minded people is likely to paralyze bigger organizations; everyone has a voice, but nothing gets done. Furthermore, a culture of consensus can discourage organizations from adding members with divergent views.
- Tyranny of the division of labor: the division of labour (and decision-making) allows an organization to be more productive, but the expertise and the specialization of each member can serve to limit their choices and prevent them from getting the global picture and making informed decisions.
- Tyranny of top-down decisions: the desire of an entrepreneur to lead and innovate is a positive quality in young organizations, but it can become a weakness in larger organizations where collaboration and members’ empowerment is key to sustainable growth.
Tyranny doesn’t come from any specific decision-making process, but from its blind and systematic application. Postmodernism is less about defining the right process than understanding the limitations of a given model and process (see the digressive approach for a broader theoretical foundation). The best you can do is to understand your dominant decision-making process and mitigate its tyranny through the use of other parallel mechanisms.
Structurelessness, consensus and top-down models all focus on the who: the validity of a decision is based solely on who makes it, whatever the scope and their motivation.
Decentralization is a model that not only looks at the who but also the why, what and how: a member of an organization might be entitled or not to make a decision based on:
- Their motivation and what they want to achieve (the why)
- Their duties and responsibilities (the what)
- The process followed to make their decision (the how)
Compared to other governance models, decentralization thus offers more opportunities to adopt a nuanced decision-making process. This doesn’t mean it cannot become tyrannical, but rather that more techniques exist to mitigate that risk (these techniques are typically adopted through a decision-making process that is not decentralized):
The Mission Statement, Values Statement and Code of Ethics provide guidance on the substance of decisions taken in a decentralized organization.
- Mission & Vision Statements: the standards that describe your organization’s raison d’être.
- Code of Ethics: a code of ethics sets out the company’s expectations for how employees should behave in any given situation, to assist with decision-making.
- Ethical Source Movement: ethical guide specific to open source software.
Methodologies such as Holacracy, Sociocracy and Agile focus more on the decentralization process: are decisions taken in an effective, fair and orderly matter?
- Holacracy: self-management practice for running purpose-driven, responsive companies. Holacracy is a meta-framework for customizing anything and everything in your organization: holacracy practice, free software, rule book, constitution.
- Sociocracy: a social technology for evolving agile and resilient organizations at any scale, from small start-ups to large international organizations.
- Teal Organizations Wiki: handbook for leaders looking to upgrade specific management practices in their organization.
- Agile (software specific) and Lean Startup methodologies.
4 Steps to Bring the Other In
Whether your organization is decentralized, makes top-down decisions or seeks consensus, many of its decisions won’t fundamentally change if it doesn’t allow a diverse range of people to participate in its decision-making process. Here are suggested steps to bring the Other in:
A prerequisite for encouraging diversity both inside and outside your organization is to build trust: “moving away from a very transactional arm’s distance relationship and moving towards a partnership, able to engage on the journey of co-creation between different parties, companies, communities, NGO partners, social sector, public sector, whoever needs to be at that table” (Read the interview).
Once you’ve built trust (and this can take a long time), the next step is to bring the Other into your organization. “You don’t have to allow the new to come in and change your organization out of all recognition. But you do have to allow the new to come in and change things” (semi-permeability).
The third step is to encourage meaningful inclusion: when you look at your organization, where are barriers to getting in and rising to the top? How can you dismantle or mitigate these barriers so that people are not having to climb over them or try to break through them in order to get to the centre where you are?
Finally, inclusion should be pursued not only within your organization but also in its ecosystem: bring the Other into your decision-making process, engage with knowledge experts outside your organization, invite a diverse set of communities to participate through co-creation (look for instance at Community Voices for participatory market research).
Change by Doing (Break Old Patterns)
Often, adopting simple habits can have a bigger impact than complex reorganizations. Below are some initiatives to promote pluralism and postmodernism in your organization.
- A Facilitator Decision-Making Model: how to guide a group of participants through the process of making a decision.
- Setting the stage for ensemble storytelling.
- How to Reach Collective Decisions Without Consensus.
- Greenback classroom-as-organization to guide participants through “deconstructing” their own organizational departement.
- Sensitivity training to raise awareness and actively break down prejudices and biases.
- Ethics Day where employees are encouraged to discuss ethical issues, often involving senior leaders.
- 3-step approach to stay true to your mission: (1) encourage employees to form their own opinion, (2) give them a voice and (3) open up ethical debates.
- Ethical retrospectives to include ethics in existing continuous improvement processes.
- Rethink what you consider to be a qualification and a successful interview.